Gold prices rises above us dollars 1,600 per troy ounce!!!

Forexpros - Gold futures rallied to a fresh record high for a fourth day on Monday 18 July 2011, climbing past USD1,600 an ounce (one ounce =31.1034768 grams) amid fears over a potential U.S. sovereign debt default and ongoing concerns over the euro zone's debt crisis. On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,597.45 a troy ounce during late Asian trade, climbing 0.21%. It earlier rose as much as 0.4% to trade at a record high USD1,600.85 a troy ounce, eclipsing the previous all-time high of USD1,594.75 a troy ounce it hit last Thursday. Gold prices advanced for the 11th consecutive day, its longest stretch of gains since August 1970. Euro-denominated gold prices rose to a record high of EUR1,138.85 a troy ounce. U.S. President Barack Obama said over the weekend that the U.S. government was "running out of time" in regards to negotiations over lifting the country's USD14.3 trillion debt ceiling before an August 2 deadline. Former U.S. Treasury Secretary Larry Summers said that a U.S. debt default would cause panic throughout the financial system and long-term uncertainty. Ratings agencies Moody's and Standard & Poor's both warned last week that a failure to raise the debt limit in time would result in a downgrade in the credit rating of the world's largest economy. (Source: Gold futures hit USD1,600 an ounce on global debt fears - NASDAQ.com)Read more: Gold futures hit USD1,600 an ounce on global debt fears - NASDAQ.com

MY TAKE: In year 2008 Tanzania produced 36,000 kilograms whereas in year 2009 Tanzania produced 40,000 kilograms of gold. Holding constant the production level of 2009 to reflect the production during the financial year 2011/12, one notes that we will produce 40,000 kilograms of gold worth US $ million 2,058 (at US $ 1,600 per ounce). Our 2011/12 budget as presented by Hon Mkulo was worth Tshs 13,525,895 million about US $ 8,454 million at US $ 1= 1600 Tshs. These calculations show that our annual gold production is worth 24.3 % of our annual budget in foreign currency. This scenario reminds me of an old political rallying cry that was then famous in East Africa : "Uchumi tunao, lakini tunaukalia!!!